Peter Lenz has been group CIO for the Austrian Federal Railways (ÖBB) since 2011. He is responsible for the strategic IT alignment of ÖBB with its market-listed companies ÖBB Holding AG, ÖBB Personenverkehr AG, ÖBB Rail Cargo Austria AG and ÖBB Infrastruktur, as well as their subsidiaries. Lenz studied Information and Knowledge Management at Danube University Krems. He began his career with globally operating auto parts manufacturer Magna International in various leading positions in Austria, Europe and North America, including a three-year stay in Toronto and New York. After that, he spent four years at OMV as head of the CIO office and IT Area Manager for Mid- and Downstream. His main focal areas as CIO of ÖBB are IT governance, harmonization and standardization, and group-wide cooperation in a heterogeneous organizational environment. Lenz earned the “Confare CIO Award” as Austria’s CIO of the Year in 2014 for his work at ÖBB.
As a wide-ranging mobility services provider, the ÖBB group ensures environment-friendly transport of passengers and cargo throughout Austria. They deliver 469 million passengers and 109.3 million tonnes of cargo to their destinations annually. 92 percent of the electric power used for the ÖBB trains comes from renewable sources – primarily hydropower. With an on-time rating of 96.7 percent, ÖBB also ranked among Europe’s most punctual train services in 2014. 39,513 employees and 1,761 trainees across the group allow 1.3 million passengers to reach their destinations safely every day. Strategic control for the group is provided by ÖBB-Holding AG.
The group has been active in the current corporate form since January 2005, when the former Austrian Federal Railways were reorganized. One of the subsidiaries of ÖBB-Holding AG is ÖBB BCC GmbH, which provides the various companies in the group with professional IT services. The staff of ÖBB BCC GmbH and their work guarantee planning and development as well as daily operation of the group-wide IT, an important business element for ÖBB. Also on its agenda are the planning, introduction and operation of new ICT applications and expansions, as well as continuous modernization of the existing ICT infrastructure.
Movie with Peter Lenz
The ÖBB Cloud Strategy
For the day-to-day work of ÖBB, modern IT and software solutions are a central success factor: IT has to prove itself as a supporter and promoter of the business strategy while simultaneously providing cost reduction and innovation. Cloud computing will certainly play a key role in the IT strategy for the entire ÖBB group in future.
Cloud computing is a consequence of the technological advancements on the IT market and a topic that affects almost all departments at major companies today. A successful cloud strategy requires all departments to be involved from the very beginning. Only then can an implementation be managed effectively – with efficient and automated IT processes that comply with current technological standards and use optimized data access. IT solutions need to consider not only technological aspects, but also the end-to-end business process aspect and any other consequences for the organization.
As a wide-ranging mobility service provider, ÖBB group delivers 469 million passengers and 109.3 tonnes of cargo to their destinations in ecologically friendly fashion each year. With a punctuality of 96.7 percent, it ranked among Europe’s most punctual train services in 2014. 39,513 employees and 1,761 trainees ensure that around 1.3 million passengers per day reach their destinations safely. Strategic control is provided by ÖBB-Holding AG, and the IT department supports and promotes the business strategy. The main focus lies on group-wide usage of solutions, a goal pursued through joint IT planning and prioritization with the respective specialist departments. Safety and reliability naturally play an essential role at ÖBB, and group CIO Peter Lenz is responsible for intelligent use of information technology: “My main task is to find synergies, make them visible and exploit them together with the IT heads of the individual ÖBB divisions like passenger service, infrastructure and Rail Cargo as well as with the internal operative IT, the IT department of the ÖBB Business Competence Center. The fascinating aspect of this is the joint determining and implementing of the future alignment of our IT. One-third of my job is diplomacy and communication.” A categorization was established to determine which services can be migrated into the cloud under which circumstances and conditions, and which ones cannot. “It is clear to us that we want to harness the benefits of the cloud, but sensitive customer data and operative data related to train control have to stay with us,” Lenz says. Cloud technology should selectively supplement the service portfolio to offer tailor-made IT services to the company.
IT Strategy and Cloud Services
Against this background, uniform application and technology maps were created for the entire group of companies, the IT planning process was aligned with the business processes, and synergy potentials among the individual ÖBB companies were determined. Besides the application layer, the ÖBB IT strategy also includes possibilities for the alignment of technical platforms like data warehousing, access and identity management, mobility, or integration architecture. The goals of the strategy are achieved through constructive cooperation between the specialist departments, transparency of the IT landscape, architecture governance with joint guidelines, and standardizations, norms and consolidation of redundant IT services, but also through the promotion of internal know-how, openness for innovation and a sensible mix of internal and external IT service provision.
Just a few years ago, the strategic IT agendas of the ÖBB group dealt primarily with organization and infrastructure – but now the focus is mostly on applications. “Due to our historical development, several hundred applications exist at ÖBB today. Many of them are indispensable specific applications for our three core business areas. But there are still a lot of possibilities for harmonization,” Lenz explains. With the establishment of the IKT GmbH five years ago, five of the group’s IT subsidiaries were bundled into a Shared Service Center for IT placed neutrally under the management of ÖBB-Holding AG. 2014 saw the next step with the integration of further shared services (HR and finances) into the ÖBB Business Competence Center. All IT operations were noticeably standardized. In the current situation of the ÖBB group, cost reduction in running operations is naturally also important. Lenz: “We have already achieved a lot through centralization. Server virtualization and standardization in the client environment, along with other measures, allowed us to reduce costs by around 50 million Euros between 2010 and 2014.” As part of the group-wide programme “FIT 2015”, the project “New IT” took centre stage, encompassing all IT measures and running until 2014.
In regard to cloud computing, the ÖBB group expects significant future benefits in various areas as a result:
- Reduced investment requirements. No specialized hardware or software is necessary to use the cloud. This reduces investment costs as well as maintenance costs.
- Pay-per-use. Cloud services are charged according to actual use.
- Easy scalability. The capacity of cloud services can easily be adapted to business developments. They can be scaled according to demand; user numbers can be adjusted and new functions and modules can be added.
- Increased productivity. With cloud computing, companies can provide more employees with access to digital business and communication processes. Mobile solutions simplify cooperation between locations and with personnel in the field.
- Fast, unrestricted capacity. Cloud services are available quickly (usually automatically) and boast nearly limitless storage capacity. This makes data handling much faster.
- Current versions. Applications in the cloud are always up to date.
Top Priority: (Information) Security
Around 500 employees at the internal operative IT department of the ÖBB group deal with project and programme management as well as with the development and operation of IT solutions. CIO Peter Lenz: “By engaging intensively with the cloud, we are establishing a clear and transparent scope of action regarding the way in which cloud services can be used by ÖBB in future.” This requires staff, Lenz adds, who are knowledgeable on contract management, SLAs (Service Level Agreements), hybrid scenarios and other associated disciplines. “The essential aspects for us are data protection and information security. All group-internal requirements must also be met in the use of cloud computing.” Currently, for instance, cloud services are being employed by ÖBB for an internal car sharing platform. “We are also in intensive negotiations regarding a training and education platform,” Lenz says. The use of office software represents a further possible addition to the portfolio. In the core ÖBB business areas like train and signal control and related IT, however, cloud computing is not an option for the CIO: “We want to continue to handle the fundamental IT systems for train operation with internal resources and internal know-how.” In terms of information security, Lenz insists on full control. “Our customers ride in ÖBB train cars because they want to get from A to B safely. That is our top priority. We offer highly reliable systems and need to continue to guarantee that is the case in the future.”
One of the biggest issues in the context of cloud computing in Austria, Lenz notes, is finding qualified employees: “There are precious few cloud experts around. It is still a young specialization that education providers need to integrate into their programmes and curricula.” Besides the purely technical issues, this also applies to related topics like data protection and legal framework conditions. Last but not least, legal certainty in the area of cloud computing is a pressing issue in Europe: “There is still a lot to do,” Lenz says, “after all, you have to be able to rely on certain rules being valid and applicable.” The CIO therefore thinks it will be necessary in future to train internal sourcing experts who can manage external partners: “We need a new form of process knowledge within IT.” ÖBB can certainly imagine migrating certain other well-defined services to the cloud provisioning model, e.g. in the messaging environment. “In any case, every step has to be taken with clearly defined handover points to make it unnoticeable for the user and, ideally, achieve an improvement.”
“Some IT Solutions will only be offered as cloud services in future”
IT management and governance are becoming increasingly important factors for Austrian companies to achieve their strategic goals. At ÖBB (Austrian National Railways), IT resources are also being bundled more and more, and cloud computing will see increasing use in future – not least due to the dimension and complexity of the company’s business as a comprehensive mobility service provider: ÖBB delivers 469 million passengers and 109.3 million tonnes of cargo to their destinations in ecologically friendly fashion every year. In 2014, it ranked among the most punctual train services in Europe with a punctuality of 96.7 percent. 39,513 employees (and an additional 1,761 trainees) in the train and bus divisions of the group help around 1.3 million passengers reach their destinations safely every day. By employing selected cloud services, ÖBB hopes to identify and optimally exploit synergy potentials throughout the group, reduce the complexity of the internal IT landscape and achieve more flexibility in terms of scaling. In addition, cloud computing in particular offers the possibility of sourcing applications and data in a targeted, technologically optimized and cost-efficient manner while complying with strict security requirements. In an interview with KURIER, group CIO Peter Lenz explains how ÖBB is preparing for the new ICT challenges like cloud computing and where the potentials of the new digital age are already being successfully utilized.
KURIER: In what way are you involved with cloud computing?
What interests me particularly is the strategic potential of cloud computing: To what degree can we use it, to what degree is it suitable? Since 2014, cloud computing has been a fixed element of our agenda, and we intend to use it more in future.
What are the areas you are focusing on?
Cloud computing can supplement the existing service portfolio of IT. At the same time, we are already noticing now that certain solutions will only be offered as cloud services in future. That is why we are preparing for their use.
Have you already developed a cloud strategy at your company for this purpose?
We have established a categorization that defines clear-cut usage criteria for cloud services. It determines what we want to – and may – do in the cloud and what not. We are currently testing this draft of a cloud policy and its applicability in concrete usage scenarios.
And what cloud solutions are you already using?
We use a cloud service for a car-sharing platform, and are in intensive contract negotiations regarding a training platform. The use of office software could be a further addition to the portfolio.
How do you react to the frequently voiced concerns about cloud computing?
Mistrust is the result of a lack of information and knowledge. That is why it is so important to get involved with the use of concrete cloud services. It allows us to recognize important details and establish know-how within our organization, figuring out where additional expertise is required and where the use of cloud services makes sense for ÖBB.
Does that mean you are also investing in building know-how among your staff?
Yes, we want to establish in-house cloud brokerage competence. Related topics like information security and data protection need to be taken into consideration and discussed. During pilot projects, ‘learning by doing’ is naturally one of the most important aspects, since our employees learn to deal with the possibilities and risks in the context of concrete projects. This in turn creates the knowledge that we need for future projects.
Are your employees interested in these new topics or are they sceptical?
Both. There is a great deal of interest in the modern IT services, but there are also concerns among staff regarding the future of their own workplaces.
How do you address these concerns?
We want to make new fields of activity available to our employees, for example with a view to cloud brokerage. Our goal is to establish an in-house competence. And new services should be acquired internally as well as externally.
How do you ensure that the individual departments know in which forms cloud computing is allowed or forbidden?
As an IT service provider – and that is what our internal IT department is – we will include the use of cloud services in our portfolio. The respective specialist department does not necessarily need to know whether a specific solution is provided via a cloud service, however. As soon as we have settled the technical and legal framework, the result is a complete service that we provide to our customers.
How do you verify the sufficient quality of a potential cloud service?
References and experiences from other companies are obviously important market instruments that help us approach potential suppliers. And as before, we will also be employing our own procurement department intensively to ascertain the economic situation of a potential cloud provider. But in the end, you can never be 100 percent sure that your cloud provider will stand the test of time, and that means that if you employ a cloud brokerage or use external cloud services, you always have to design an exit strategy ahead of time as well.
For which areas of IT will you not be using the cloud?
Cloud computing will not be used for train controlling or signalling systems, nor for any other immediately train-related IT applications. We want to be sure that we continue to handle all fundamental IT systems pertaining to train operation with internal resources and internal know-how.